First we must agree on some points. Number one is that the pharmaceutical industry, while a business which exists to make money, is a very different business than others. Why discover drugs when you could make tyres, or tacos? Presumably because you want to apply to scientific training to something that will help humanity in some small way. Consequently, point number two follows. Drugs are not tacos. Creating a demand for drugs is inherently not the point of the business. Drugs that make a significant difference in peoples lives create their own market. Lipitor became a huge seller before all the massive market-creating direct to consumer advertising started. Therefore we should strive to create drugs that solve problems that exist, not find a use for a drug that your have.
Point three is that all of the major blockbuster drugs were created before the merger mania. it is impossible to be innovative in a crushing bureaucracy. Just ask any of your Russian colleagues about being innovative in the Soviet Union. Consequently, the mergers need to be undone. Pfizer, Novartis, etc. need to be broken up into smaller companies where a drug that produces $350 - $400 million in revenue would be significant enough to make a difference.
A corollary to point three is that is drugs are not tacos, you can't let managment come from the same business background that is created in most business schools. Research can not be viewed as an expense. It costs about a billion dollars and takes ten to fifteen years to create a functioning research group. Cutting, or shutting down a research site is equivalent to shooting your dairy cows for meat, or eating the seed corn. The steak may taste good, but when you realize you need milk, you will need to go buy cows that you really should already have.
Pfizer has admitted that it can't do research and is looking around for innovative products from small companies that employ the scientists that Pfizer fired when they shut down all the research sites that they acquired in the mergers. To quote a Pogo comic strip, "we have met the enemy and they are us!".
The problems in the pharmaceutical industry can be solved by reversing the results of merger mania. Also require that the shut down facilities be turned over to a non-profit foundation (Hey Bill and Melinda Gates, I'm talking to you) where companies can be incubated for free for a period of time. Be very loose on the criteria to get in and get started and then do a two year review and be very harsh on the criteria to stay. Let the non-profit be involved in getting funding and make sure it has enough clout to keep the Harvard MBAs out. Let them then license the products out to recoup the costs. Core functionality like scale-up, Preclinical and clinical research can be centralized so the scientists can focus on research.
we have to get small or all we will have are 3rd generation Viagras and more invented conditions like "low testosterone".
I welcome feedback. Contact me, follow on twitter (@VictrixCMC). Particularly if you are Bill Gates.